The dollar delta to payrolls

1 April, 2016

There’s a reason why #NFPGuesses trends on Twitter on payroll day, because that’s what they are for the most part, guesses. Some people spend an inordinate amount of time forecasting the various components and there’s probably some mileage in it, but then come revisions to the prior months and most of the good work is blown out of the water. The chart below shows the recent EURUSD reaction to payrolls reports. Comparing this to some of the reaction we saw at the tail end of last year, the signs are the dollar is less sensitive to payrolls surprises. This makes sense for two reasons. Firstly, the possibility of a rate move at the next two meetings is pretty slim, so we’d have to see a fairly large outlier for the data to change that perception. Secondly, Yellen intimated in her speech earlier this week that the inflationary consequences of the unemployment rate below the 5% level were less than would have previously been the case.

Looking at overnight action, we’ve see the Nikkei weaken by more than 3% overnight, although the reaction the yen was limited compared to the historical relationship between stocks and USDJPY. The weakness in the latest Taken survey played a part in that. We also saw more PMI data in China, with the manufacturing release showing a welcome move north, from 49.0 to 50.2. Ahead of US jobs, we also have final PMI data for the Eurozone, together with manufacturing data for the UK at 08:30 GMT. Sterling was interesting yesterday, initially rising on the upward revision to Q4 GDP, but then sagging as the thought of a 7% current account deficit weighed heavily on the currency and rightly so.


Source link  
USD Bounces From Month Low

Trump administration has presented its 2018 budget plan to Congress last evening. The budget plan calls to slash $3.6 trillion...

Dollar index hit a new low

The dollar index hit a new post presidential election low of 96.95 on Friday May 19th. EUR/USD hit a high of 1.1211...

USD Hit Post Election Low

To date the dollar index has almost given up all of the post presidential election rally...


BoE Expected to Keep Rates Steady

ECB Governor Draghi will make a speech in the Dutch Parliament at 12:00 BST today. It will be Draghi first speech...

Trump's Tax Reform Plan

US Treasury Secretary Mnuchin announced Trump’s tax reform plan in a press conference...

Corporate Earnings Lift US Stocks

Last week the US President Trump stated on twitter...


Market Concerns Eased

The first-round voting of the French presidential election was revealed on Sunday night...

Dollar Plunged on Trump Second Statement

The dollar index fell to a 2-week low of 99.91 in the early hours...

Markets Eye on the First Trump-Xi Meeting

US President Trump and Chinese president Xi Jinping, are scheduled to meet today at Trump’s Mar-a-Lago resort in Florida...

  


Share: